Military pension cuts in federal budget agreement draw local opposition

Sunday

Jan 5, 2014 at 12:13 AM

SCOTT THOMPSON

Vietnam War veteran Bob Sterling retired from the U.S. Navy in 1977 after a distinguished career that saw him reach the rank of master chief petty officer.

Following his transition to civilian life and subsequent work with the defense industry in Arlington, Va., Sterling, 73, moved to South Carolina and started his own company. It specialized in software that assists veterans affairs officers nationwide with providing help to retired veterans and their families seeking compensation for injuries or illness. Sterling sold the company three years ago and fully retired.

But now Sterling, commander of Bluffton American Legion Post 205, is worried many of the people his company was designed to help will face tough times ahead following a controversial cut to military retirement pay in a two-year federal budget agreement passed by both houses of Congress and signed into law by President Obama last month.

The deal has drawn the ire from Sterling and other local veteran group leaders, along with several political figures statewide.

"I do not understand how the representatives of a nation can consider service retirees as second-class citizens when other beneficiaries of federal largesse are not affected," Sterling said Friday.

The 1 percent cut to the annual cost-of-living adjustment (COLA) for working-age retirees was expected to save the government roughly $6 billion over the next 10 years. It will begin taking effect in 2015 and will be phased in over three years. Once military retirees reach the age of 62, they can go back to receiving full pensions. An amendment to the agreement exempting disabled veterans who are forced to retire from the military early and survivors of those killed in action was passed last week, eliminating about 10 percent of the projected savings.

The cut was a key cog in the budget agreement crafted by U.S. Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.). The deal, which replaced $63 billion in automatic spending cuts known as the sequester over the next two years, also reduces pensions for civilian federal employees who are hired after its passing.

"I worked for this country, basically," Sterling said. "Other people in the United States get federal assistance just for being an American and not doing anything, and they're not facing cuts. A nation that tries to detract from its service veterans is one that's on its way down."

John Payne, a retired Marine Corps colonel and chairman of the Beaufort County Military Enhancement Committee (MEC), said his group is also opposed to the legislation.

"It does one good thing in that, unlike sequestration, it allows services to cut their budgets where they want to," Payne said, "but other than that, it's a broken promise. The people this will affect made an agreement and basically signed a check with the government up to the price of their life. The government is not honoring that check."

Changes possible

Facing backlash from their constituents, many elected officials in military-heavy districts across the country have vowed to revisit the deal when Congress reconvenes from its holiday break this week and propose restoring the COLA cuts.

South Carolina Republican senators Lindsay Graham and Tim Scott have been vocal in their opposition to the budget deal, citing the cuts as a primary reason. Representative and former governor Mark Sanford (R-Charleston), whose district includes Beaufort County, also voted against the agreement.

"We're having real pension reform; that's good," Scott said in an interview with Fox News Channel's Greta Van Susteren last month. "But there's two steps back. There's the ugly and the bad. The bad is the fact that we're paying for it over 10 years. The ugly is that we're asking our military to pay for it for us."

Drop in benefits

Currently, those who retire from the military after 20 years of service receive 50 percent of their active duty basic pay annually. That percentage increases 2.5 percent for every year past 20 served until 30 years of more or service, where retirees receive 75 percent of their basic pay annually.

The Military Officers Association of America recently estimated the cuts would cost a typical retired officer more than $120,000 over 20 years.

But supporters of the agreement, including Ryan, have maintained the COLA cut is a modest adjustment where, for those who retire before age 62, the annual increase in their retired pay will be just 1 percent less than the inflation rate.

"I stand behind the need for reform," Ryan wrote in a USA Today editorial on Dec. 22. "For me, there's simply no choice between responsible reforms of military compensation and making what our military leadership has called 'disproportionate cuts to military readiness and modernization.' Every time we kick the can down the road, we put our troops' combat readiness at risk."

Payne, though, said retiring at age 40 from military life is different from civilian life.

"Some of these guys may have been deployed away from their families six or 10 times and have put their lives at risk," he said. "It's not very easy to get people interested in that line of work. You have to create incentives, and some of those are being taken away."

Different ways

Payne and MEC vice-chairman Jim Wegmann said they support the government's attempt at deficit reduction, but that it can be achieved in a better way.

"Nobody wants to see a balanced budget more than our membership does," Payne said. "But we don't think that should be put on the backs of the people who keep us free and are willing to risk their lives."

Added Wegmann: "We're happy that Congress has come to a resolution with bottom line numbers that will help our Department of Defense and other military entities, but it's a little hard to ask those who have sacrificed so much already to sacrifice more in order to fix a budget crisis."

Meanwhile, Sterling is hopeful the cuts will be reversed.

"I think they'll wind up changing it," he said. "It's the most politically stupid thing I can think of. Out of a lot of politically stupid things going on in this country, this is near the top."

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